Month: June 2017

What a last couple of weeks it has been for Walton International – the Alberta Securities Commission suspended Walton’s registration which prohibits them from selling any more of their investments. And then they hired Ernst & Young to take them through the CCAA process in an attempt to re-organize their debt. This sounds almost identical as the League Assets story we discussed last summer in this blog post. One can conclude the Walton matter will have the same ending! How can a company make hundreds of millions of dollars selling land be broke after 25+ years of being in business? Rumor on the street is the company is being gutted and those (at the top) have already cashed out their millions…

WAS THIS ALL PREDICTABLE?

Back a few years ago I came across a Sales Representative that worked at Walton International at a Calgary Flames hockey game. After chatting for a few minutes he suggested I look at his investment opportunity – it was a parcel of land down by Spruce Meadows (in the southern tip of Calgary). Although I was not interested in the investment, I agreed to meet with him at his office a short while later.

I remember their office being really nice and it seemed like they had a ton of staff. After receiving a brief sales pitch I was sent on my way with an envelope full of paperwork. Some time later, I opened the envelope and (as part of the package) discovered a letter from a lawyer named Donald Boykiw from the fancy Bennett Jones LLP law firm.

The letter is short and cuts to the point – it indicates that Boykiw is writing to inform Walton that the Alberta Securities Commission had reviewed Walton’s business practice of selling undivided interest in land to purchasers and that this review had been done as a result of sanctions against Walton’s prime competition in Alberta land banking. Boykiw goes on to state, “I would also advise that the Commission staff member who was involved in this matter has further advised that the ASC’s enforcement counsel would not be recommending any changes to the current forms of referral arrangements for both the mortgage referrals from Westmount Mortgage Corporation and the land referrals from Cordex Realty. We have also received a follow-up call from the registration counsel at the Alberta Securities Commission indicating that they ave also completed their review of such referral agreements and were not proposing any changes.” A copy of the letter:

The significance of this letter is simple – Walton International’s business model sees them allegedly buying farm land for as little as $400 per acre and turn around only days later and sell it for up to 7000% increases to investors from all over the World – and the gang down at the ASC gave them a clean bill of health while sanctioning others in the same line of work. And don’t forget – this happened during Ralph Klein’s duration as Premier of Alberta who’s daughter physically worked at Walton’s head office.

For those people that do not know who Walton International are (or were) – they purported to be the largest land banker (and then later land developer) in the nation. They had many projects throughout Canada and the United States. They had come under fire in some circles for paying huge upfront commission to their sales people and for having lavish spending sprees on chartered boats and trips for Staff. In one instance, it was reported they had chartered a large ship and had the expensive Self-Help Guru Anthony Robbinsas a guest to get their staff motivated to sell their product.

Facts are – may people have been reporting on Walton’s demise for years. A simple google search has found us endless reports from press from all over the World suggesting Walton’s business plan had some distinct cracks and was leaking severally. An article in the Ottawa Citizen from March 2013 suggests the land banking project in Ottawa was in trouble.

What happened in Singapore when they had several complaints about many Land Banking firms – even Walton International? Out comes the huge Public Relations wheel and they brought an entire news crew to see their operations in Canada….

This video is so biased towards Walton but comes across as some bi-partial news telecast – We wonder how much more they raised after this video made the rounds…

Would this all have been avoided IF the ASC had not given them that clean bill of health back in 2002 – that they used as a sales aid for their sales people??? Shame on the ASC! This story is going to be huge when the cards ALL come falling down – and this letter is going to be used in any case against the ASC! How are they going to be able to protect the Walton Investors when they are complicit in allowing Walton to exist – even going as far as giving legal advice that their sales people used to close the unexpected investors?

Again we are truly seeing what kind of a person BCSC Chair Brenda Leong truly is – this week she responded to our Freedom of Information request in what can only be described as a continued act of cowardice. She had another opportunity to put much of our discontent to bed and she once again has decided to continue playing the game. That is fine – we are going NOWHERE!

BCSC Chair Brenda Leong

Our latest FOI requests was simple – we wanted to know why she was not responding to our repeated request to answer questions including why her staff (complete and udder failures of lawyers Olubode Fagbamiye and C. Paige Leggat) did not take our Settlement Offer to the Executive Director and whether or not she felt they manipulated key evidence in our hearing.

As you will see below she has decided to hide under her rock….despite her job description literally stating…

This was finally a chance for her to defend the actions of her Staff and to show these same staff that she will defend them against any and all allegations of wrongdoing. Fagbamiye appears to be simply too dense to even understand this woman (his boss) does not have his back.

Leong’s reply is as follows:

Between Leong and Executive Director Peter Brady – it is very clear this organization is failing the people of the Province of British Columbia. Investors have a right to know answers to our questions and they continue to hide from answering these questions….

In November 2007, the Developer of the Falls Resort approached me and asked if I knew of anyone that might purchase a unit in the Deercrest Townhomes, located on the property. He had Unit 101 that was available for sale and the Respondents indicated they would ask around. I called one of the investors in Edmonton and asked if he wanted to buy and he indicated he would. The sale was completed a few days later.

Shortly there later, a commission cheque in the amount of $24,292.75 arrived made payable to West Karma Ltd. I placed the cheque into the WKL bank account and NEVER wrote a cheque to myself personally. Looking at the bank account statements for WKL for the following 10 days, $20571.61 was spent directly on business expenses for WKL and FCC and the balance were used for personal expenses.

THESE WERE NOT INVESTOR FUNDS YET PAID FOR BUSINESS RELATED DIRECTLY TO THE WKL AND FCC.

That’s fine – people place funds into their business accounts on a regular basis as shareholder loans. IF the BCSC’s Executive Director (and his Staff) wanted to bring accurate allegations in their Notice of Hearing they needed to complete a proper accounting and bring in a proper number into the allegation….but let’s see what Lead Investigator Elizabeth Chan had to say during the cross examination during our hearing in April 2014:

Q Can we put up, pull up Exhibit 00240? Can you please read this letter for the panel?

A Just the body of the letter, like, —

Q Just —

A — after the “re” line?

Q Just lead the letter please, from who it’s addressed to, and who it’s from and the body of the letter, sure, please.

A Okay. So, I don’t think this is a document that I obtained. Uhm, it says:

West Karma Ltd., BCDear Sirs/Mesdames:Re: Sales of 101-51096 Falls Court, Chilliwack, BC (the “Property”) by BlackburnDevelopments Ltd. (the “Seller”) to -REDACTED- (the “Buyers”) effective November 23, 2007 (the”Completion Date”). As notary for the seller, we enclose our firm trust cheque drawn in your favour, in the amount of $24,292.75 representing payment in full for the Commission with respect to the above transaction. Please provide our office with a receipt for payment at your earliest convenience. We trust you find the foregoing and enclosed to be in order, however, should you have any questions, please do not hesitate to contact the writer or Shirley MacKillop of this office.Yours truly, Simpson & Simpson. And the name there says, “R. Dean Simpson” and the letter, the date, November 23, 2007.

Q Thank you. And have you ever seen this document before?

A Uhm, I didn’t obtain this document during the course of my investigation, but I did see it in the binder of materials of materials contained in documents that you were intending to rely on.

Q That’s the first time you saw it though?

A Yes.
Source: Hearing Transcript, April 11, 2014 (pages 23-25)

This is the testimony of Staff’s most important witness – a Certified General Accountant with a degree from the University of British Columbia in Bachelor of Commerce? That she never saw items going into the bank account that were relevant IF they wanted to bring an accurate number into the hearing room. Elizabeth Chan is a highly paid Senior Investigator with the BCSC – it is HER job to find out the numbers used in the Notice of Hearing are accurate! There is NO excuse for the sloppy work Staff completed in this matter!

How is this even possible is the onus was on the Executive Director to bring in clear and compelling evidence to prove the allegations in the Notice of Hearing? Was the Respondents not entitled to a fair hearing with accurate numbers as the BCSC boasts on their website?

This is just one example of many proving the BCSC brought a number into the hearing room that was NOT accurate. This would have never held in a REAL court room. Shame on the BCSC!